Analysis: Nintendo Bets on TV App to Sell Pricey Wii U

Nintendo TVii, built in to the Wii U console, promises to make live television more interactive.Photo: Nintendo

Nintendo doesn’t want Wii U to just be your game machine, it wants it to replace your cable box. And at a price of $300 to $350, it had better do just that.

At an event on Thursday to announce new games and details about the upcoming Wii U console, Nintendo spent a good deal of time discussing a built-in app called Nintendo TVii. The pitch is simple: Do all of your television watching through the Wii U’s GamePad, which features a built-in touchscreen that can display information different from your television set. Want to watch live TV? You can browse programs through a graphical interface on the GamePad screen while you’re watching another program on the TV. Subscribe to Netflix, Hulu or Amazon Prime? If your shows are available on those services you’ll see that as a viewing option.

Nintendo TVii also aims to make viewing more interactive: You can chat with friends or get more information while sports games are playing, for example. And there’s an intriguing feature that pulls screen captures and summaries from TV programs, to let you live-tweet your favorite moments.

If Nintendo’s going to attract consumers to a new game machine, widening its umbrella and embracing significant non-gaming initiatives is probably an excellent bet. It’s becoming more and more likely that it won’t be possible to just sell consumers a game console anymore. Nintendo 3DS launched in 2011 at $250 and Nintendo quickly had to reduce the price after sales slumped. Smartphones and tablets are proving to be serious competition for gamers’ time and money in the handheld space.

Will it be the same for game consoles? When Wii U launches on Nov. 18, the cheapest model with 8GB of storage will cost $300, a price likely mandated by the extremely strong yen. That makes Wii U $50 more expensive than Wii was when it launched in 2006. But that doesn’t even tell the whole story, since the $250 Wii came bundled with the Wii Sports game. Nintendo is introducing a “Deluxe Set” with the NintendoLand game in the package and 32GB of storage, but this costs $350.

Nintendo of America is likely not happy at all to be saddled with these prices, but it seems to realize that it can’t just sell consumers the most expensive game machine on the market. It has to sell them a device with broader functionality than that.

Image: NielsenThere’s reason to believe that expanding the TV and movie capabilities of Wii U, and prioritizing those features in its sales pitch, can be a winning play for Nintendo. A staggering 25 percent of Netflix users watch the streaming video service’s content on Wii machines. That’s a lot of people watching television on Nintendo hardware, roughly double the number who watch on Xbox 360 or PlayStation 3.

Nintendo TVii sounds great in theory. But will it work? Until Nintendo spills many more details than it did at its presentation this morning, I have doubts. For one thing, Microsoft announced “live TV on Xbox 360″ quite a long time ago, and I still don’t have anything like that.

I subscribe to Comcast. Laugh at me if you must, but I am in the same boat as so many other Americans. Can I watch live TV through my Xbox 360, after all of Microsoft’s bluster? No, I cannot. The only TV customers who can are those who subscribe to Verizon’s FiOS service, and even then only select channels are available.

So when Nintendo says I’ll be able to pull Wii U out of the box and use its graphical interface to watch live TV, I’m having trouble believing that’s going to happen. Who will actually be able to use Nintendo TVii in the manner that Nintendo implied this morning, and for whom will it just be a fancy Netflix app?

And although Nintendo promised to answer “all” of the remaining questions about Wii U with Thursday’s presentation, it barely scratched the surface. It didn’t talk at all about Nintendo’s online service plans. Nintendo has said previously that there would be a “unified account system” across Wii U and 3DS, and talked up its “Miiverse” social network that lets players chat and connect on Wii U, but didn’t go into any more detail about that today.

Nintendo’s weakness has always, always been its online services. Wii’s online shopping is restrictive, painful to navigate and barely updated with quality content anymore. Online gameplay has been uneven at best and non-existent at worst.

With digital game shopping becoming the new normal and constant online connection going from “fun bonus” to “requirement,” the real questions about Wii U are still up in the air. Taking Nintendo at its word that it has developed a robust new way to watch television would be easier if it showed that it was fundamentally changing the way that it approaches online services.

Because even if games aren’t the only important thing, if you don’t want games you’re still not going to buy a Wii U.